Conditional concessional tax rates do not trigger section 8(2A) relief where tax-paid raw material is required.

A concessional two per cent inter-State sales tax rate for iron and steel applied only when the goods were manufactured from tax-paid raw material within the State. Because that concession operated only on a specified condition, it was not a tax generally applicable at the lower rate, so the Explanation to section 8(2A) of the Central Sales Tax Act, 1956, prevented the goods from being treated as exempt. The claim under section 15(b) also failed because that provision covers reimbursement of tax actually paid under State law, and no State levy had been suffered on the turnover of kamani. The inter-State sale was therefore taxable at four per cent.

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Issues: Whether iron kamani, being a declared commodity, was liable to inter-State sales tax at two per cent or four per cent under the Central Sales Tax Act, 1956, having regard to the State notification granting two per cent rate only on the condition that the goods were manufactured from tax-paid raw material.

Analysis: The State notification prescribed a concessional two per cent rate only where iron and steel were manufactured from raw material on which tax had already been paid within the State. Such a levy was conditional and not a tax generally applicable at the lower rate. Under the Explanation to section 8(2A) of the Central Sales Tax Act, 1956, goods taxable only in specified circumstances or under specified conditions are not treated as exempt from tax generally, and the benefit of section 8(2A) is therefore unavailable. The claim based on section 15(b) also failed because that provision contemplates reimbursement of tax actually paid under the State law, whereas the goods in question had not suffered State levy on the turnover of kamani.

Conclusion: The assessee was not entitled to the benefit of section 8(2A), and the inter-State sale of kamani was rightly taxable at four per cent.

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